Middle-Range Accounting And Its Roots In Procedural Language Theory

Transcription

1 Middle-Range Accounting And Its Roots In Procedural Language Theory Stream 7: Critical Accounting Glen Lehman University of South Australia Address for correspondence: Associate Professor Glen Lehman Division of Business and Enterprise City West Campus University of South Australia GPO Box 2471 Adelaide South Australia Phone: (61) (08) Fax: (61) (08)

2 Middle Range Accounting and Perspectives on Language 1, 2 Glen Lehman University of South Australia Adelaide This article explores Habermas incredibly rich A Theory of Communicative Action and Between Facts and Norms which has influenced the middleground perspective as advanced by Jane Broadbent, Richard Laughlin and Michael Power. Their accounting work on accountability mechanisms, critical accounting and public sector accounting issues create new ways to think about what accounting is, and what it can do. Yet, their Habermasian assumptions expose some instrumental problems which can be resolved by reactivating a role for accounting in the public sphere. The accountability perspective implicit in Broadbent-Laughlin-Power can be extended using ideas from the work of Johann Herder and Wilhelm Von Humboldt. These revisions to accountability research reflect an expressive language perspective which can enrich our understanding about what is accountability. More particularly, in the 20 th century Hans Georg Gadamer has further refined this expressive language position which can illuminate accounting and accountability structures. An expressive theory of language, it is argued, offers a social imagining that can re-figure our understanding about what is modernity and its conception about what is accounting in escaping the circular logic of capitalist modernity. INTRODUCTION In recent years, critical accounting theory (CATS) has been influenced by an applied linguistic turn which has adapted the philosophical work of Jurgen Habermas 3 (see Laughlin, 1987; Power and Laughlin, 1996; Broadbent, Jacobs and Laughlin, 2001). In the analysis that follows a different perspective on language is offered to explore the Habermasian strain running through critical accounting and accountability research. By returning to the debates between Hans Georg Gadamer and Jurgen Habermas new insights in to accounting and accountability scholarship can be developed (see Arrington and Francis, 1989, 1993; Schweiker, 1993, Shearer, 2002). More particularly, the accounting and accountability research strand as developed by the Broadbent-Laughlin-Power school (hereafter BLP) adapt 1 With apologies to Jurgen Habermas, From Kant to Hegel and Back Again The Moves Toward Detranscendtalization, The European Journal of Philosophy, Vol. 7, No. 2, 1999, pp This project has benefited from the comments offered by Ed Arrington, Jane Broadbent, David Crowder, David Cooper, Rob Gray, Richard Laughlin, Chris Humphrey, David Owen, participants at the 2002 British Accounting Association Annual Conference in Jersey, UK and The Critical Perspectives Conference in New York, 25 th to 27 th April The Broadbent-Laughlin-Power school of thought is influenced by Jurgen Habermas work but this does not mean that all the articles are necessarily compatible. In their most recent work they explicitly explore some of the limitations of health care reforms within the UK public sector. 2

3 Habermas Theory of Communicative Action and Between Facts and Norms. Habermas work assumes that language must be comprehended in terms of the structures of discourse. More particularly, the accounting-accountability issue turns on whether a theory of society can be explained in the light of a procedural interpretation of language or whether the criterion of accountability renews and develops itself in discourse. For Habermasian theory, a procedural interpretation of language theory assumes that moral evaluation must be contextualised within procedural structures. These assumptions guide an accountability research strategy where action and transformation are guided by reference to a procedural rule. It is, however, problematic whether a focus on procedure captures all that is human; where different notions of human agency need to be given greater consideration by accounting researchers. 4 The Habermasian methodology which guides the BLP school has often been defined as a middle-ground, or middle-range accounting research. In particular, Richard Laughlin has observed that his method shuttles between a skeletal ontology and empirical observation to offer another way to imagine what is accounting. This broader way of thinking explores the limitations of procedural accounting and its association with a theory of language which limits interpretation to procedure (see Power, 1997, Laughlin, 1987, 1995, 2002). While Michael Power s influential Habermasian position has scrutinised the role of the audit profession in creating an interpretive accountability perspective. He has, however, acknowledged the limitations of his methodology. He stated: So what after all this, is the relevance or use-value of this book? Nothwithstanding a few remarks on policy at the end of Chapter 6 the answer is that I really do not know. And yet, I believe that this gives the book the best chance of actually being useful. (Power, 1997, p. 24). Arguably, these limits might be teased out through consideration of the perceived constraints that Habermas imposes on the role of language (Power, 1993, 1997). Arguably, this limitation reflects a narrow social imaginary which impact on Habermas procedural language theory. Procedural language theory is challenged using an expressive interpretation in to how language shapes our world and its structures of governance (accountability). Jurgen Habermas assumes that language simply designates means, whereas Hans Georg Gadamer argues that language is a medium through which we not only articulate meaning, but express as ourselves as a community (see Gadamer, 1975). While the BLP school offer a unique perspective which explores the limits of free-market accounting it is not the only such perspective. It is therefore, appropriate that we examine whether a procedural method has the means to tame capitalism and its ability to avoid reform proposals. Put a little differently, do the BLP proposals have the imaginative means to devise a corporate governance structure which shapes an accountability which teases out a sense of reconciliation that repairs and respects the existing community differences? The accountability challenges posed by Habermasian inspired accounting researchers are considered in three principal sections. The first section analyses the craft of accounting from a procedural language perspective. It argues that a 4 In this regard, Habermas procedural interpretation concerning the role of language falls within an ethnographic accounting research method (see MacIntosh et. al. 2000). More particularly, in the broader philosophical literature questions have been asked about whether liberal notions of governance have a strong enough conception of reasoning to consider people s background attachments and cultural values as they shape people s lives. 3

4 procedural social structure tends to privatise virtue and submerges others dialogic reform strategies. The second section outlines some links between the BLP school s middle-road strategy and procedural language theory. The third section introduces the debates between Hans Georg Gadamer and Jurgen Habermas in comparing procedural and expressive derivations of language theory. At the very least, this strategy offers a way to imagine how to reform capitalism s unremitting instrumental and procedural logic. This accountability framework aims to tease out an appreciation that a strong spirit of reconciliation heals differences and respects the commonalities among accounting theories. 5 Middle Range Accounting and Language Theory By exploring Habermas adaptation in an accounting context it becomes possible to determine whether technical accounting and its free-market assumptions have worked to privatise virtue. More particularly, it provides an opportunity to determine whether a Habermasian base is enough; that is, it is arguable that the procedural trend in ethical theory has worked to submerge other dialogic and expressive interpretations of language. After all, it is language and communication which shapes the criterion of accountability. In particular, when considerations of virtue have been privatised other dialogic and expressive strategies give way to free-markets and earning management models (see Shearer, 2002). It is reasonable to argue that it is in the various works of Laughlin and Power that a Habermasian inspired conception of accounting and accountability is developed. Laughlin (1986, 1995), in particular, proposed a middle-ground method to understand the current social system and developed new ideas to evaluate the craft of accounting and construct a dialogic notion of accountability. His framework searches to enrich a skeletal ontology through empirical contextualisation and evaluation at the advocacy level (Laughlin 1995). He builds on not only Habermas, but also on Merton s analysis of social behaviour. Merton called for middle-range thinking which apparently held the largest promise, provided that the search for them is coupled with a pervasive concern with consolidating special theories into more generalisable theories (Merton, 1968, pp , paraphrased from Laughlin, 1995, p. 79). He argues that: The middle-range that is referred to below has no faith in the development of such a general theory. Put simply the middle range of this essay maintains that there can only ever be skeletal theories in social phenomena the hope for a grand theory, similar to Parsonian thought, is wistful and incorrect quasi-scientific thinking of a highly questionable nature. But this is only one of the areas of difference the middle-range thinking in this essay also differs to Merton s emphasis on methodology (with its desire finally, although maybe immediately, to adopt highly theoretical methods for investigation) and change (with its purposeful distance from getting involved in any value judgements about what is being investigated) (Laughlin, 1995, p. 79). 5 The central idea to bear in mind is that Habermas strategy creates a tendency which limits the left- Hegelian injunction that we must investigate the cultural and social causes of the ideological hegemony implicit in Western meta-narratives (see Laughlin, 1995). For modern accounting, with its roots in a Lockean-Kantian conception of ownership and enterprise this invites us to explore its philosophical antecedents in cultural historicism (see Taylor, 1975). 4

5 Here, Laughlin adapts Habermas consensus building strategy in the search to transform our basic institutions to create openness and critical space. He argues that public institutions must satisfy the need for some debate about what these institutions are actually trying to achieve (Laughlin and Broadbent, 1993, p. 364). But is this enough? Crucially, BLP rely on Habermas procedural derivation of reason as a basis on which to develop a middle-ground approach to guide the enterprise of accounting thought (Laughlin, 1986, 1995). Furthermore, central to the middle-ground method proposed by Laughlin (1995) and developed by Power, Laughlin and Cooper (2002) is Habermas argument that:...a speaker can rationally motivate a hearer to accept his speech act offer because...he can assume the warranty [Gewahr] for providing, if necessary, convincing reasons that would stand up to a hearer s criticism of the validity claim. Thus a speaker owes the binding (or bonding: bindende) force of his illocutionary act not to the validity of what is said, but to the coordinating effect of the warranty that he offers; namely, to redeem, if necessary, the validity claim raised with his speech act. (Habermas 1984, p. 302, emphasis in original) The strong assumption in Habermas theory of language, is that a speaker and hearer in the communicative sphere owe each other reciprocal recognition. This means that each assertion is given a warrant to enter the ideal speech situation where people are transformed by the force of the better argument. Here, the purpose of Habermas model is to assess communication that is incompatible with the good or better life. These set a procedural test that substantive claims must pass in order to be normatively valid. They consist in universal rules of discourse reciprocal accountability, inclusiveness, freedom to question claims and to presuppose counterclaims, non-coercion these reflect the legitimate procedural constraints that we are entitled to make, that indicate the basis for rational agreement regarding the justness of a given norm, or assertoric statement(s). Here, Habermas develops a role of language which echoes Hegel s assumption that the capacity to express thoughts is the medium through which reforms are articulated. Arguably, the BLP school can offer only procedural respect and interpretations based on traditional accounting techniques. This is because their Habermasian structure does not provide scope to create a substantive examination in to the effects of accounting reforms. Moreover, the art of giving an account reflects a need to express the value choices which underlie accounting practices (though often invisibly so) that accounting is a political as well as a moral practice (Francis, 1990, p. 7). In the spirit of Cooper and Sherer (1984, p. 208) it involves a process of recognition. As they argue: Our position, that the objectives for accounting are fundamentally contested, arises out of the recognition that an accounting contains a representation of a specific social and political context. Not only is accounting policy essentially political in that it derives from the political struggle in a society as a whole but also the outcomes of accounting policy are essentially political in that they operate for the benefit of some groups in society and to the detriment of others. (Cooper and Sherer, 1984, p. 208, found in Francis, 1990, p. 7). 5

6 Cooper and Sherer s challenge involves understanding how one particular social imagining has guided our understanding of accounting and accountability. More fundamentally, it is arguable whether the social image of a reformed capitalist social structure has the expressive power to explore the role of moral theory and associated impacts on liberal-democratic social structures. More fundamentally, the BLP school apply Habermas insights to adjudicate between accounting reform proposals. Teasing out the assumptions in their accountability model, and its associated theory of language, provides an avenue to reflect on the relationships between the structure of language and the practice of discourse. Here, Power and Laughlin (1996) have unpacked this notion in their accountability interpretation of Habermas Between Facts and Norms which integrates two famous strands of thought. One strand of thought is that of Hegel, and the other is Kant. Habermas combines their ideas to offer a model where the rule of law is now the mechanism which judge different claims made in democratic societies. But, as we all know democracy imposes its accountability structure on the minority who demand that their otherness be given respect. Put simply, it is our imagination and expressive abilities that shape our world. For accountability purposes, it is the provision of better accounts that reflects a hermeneutic act of retrieval and this is something but this way of thinking is defined as out of bounds by Habermas framework. For the purposes of evaluation, it is worthwhile remembering that Habermas does not develop the fact that Hegel s framework grounded Kantian ethics at the practical level of everyday deliberations in searching to reconcile differences. Hegel s principal focus, at a very general level of analysis, was to avoid some of the difficult doctrines associated with Kant s search to locate universal moral mechanisms through the a priori capacities of the human mind (mentalism). The implication is that despite the fascinating interpretation of Habermas Between Facts and Norms it remains problematic whether accounting researchers have explored an expressive means to imagine another role for language. Again, to put this argument differently it is useful to add to the lexicon of accounting and accountability research the supposition that Habermas definition of language explicitly excludes the background horizons of value that shape many people s lives (see Taylor, 2002). The implication for accounting policy is that our understanding of accountability remains procedural, and in offering a conception of political recognition it does not explicitly tease out people s differences in a spirit of healing to recognise those commonalities which would benefit all groups in society. The accountability position that is advanced in this article recognises that accounting is a contested concept, but that this does not mean we ignore differences and important cultural and social values. Rather, in the spirit of democratic healing the accountability model in this article recognises that language is both a structure and a practice which must include in its development the values implicit in magnanimity, honesty and trust. A technical and procedural conception of accountability has not undertaken this task, and it is probably for this reason that critics consider accountability to be an awful idea (see Hoskins, 1998). Our understanding of accountability, however, does not have to lead to awful consequences because it is possible to recognise and articulate commonalities which celebrate difference with a spirit of reconciliation and respect. Put simply, it is problematic whether middle-ground accounting research guides a conception of accountability that reconciles differences and transcends the inadequacies of the current social structure. Overcoming the limits of the Habermasian conception of accountability, it is argued, that we need to consider an 6

7 accountability structure that tackles injustice and recognises difference through a dialogical method that recognises that: [P]eople can bond not in spite of, but because of, difference. They can sense, that is, that the difference enriches each party, that their lives are narrower and less full alone than they are in association with each other. In this sense, the difference defines a complementarity (Taylor, 2001, p. 89). Between Facts and Norms To A Reconciling Accountability Following Sherer (2002) research into accounting and accountability must satisfy the information needs of relevant publics with justice and fairness for all citizens (and people). To this point it has been argued that the BLP school have exposed crucial limits of positivist accounting and the silences of accounting in terms of trust, openness, transparency and consideration of virtuous practices (see Laughlin, 1987, Habermas, 1968). The article has explored the accounting and accountability implications of its procedural research strategy. In broadening the criterion of accountability, it is envisaged that the role of language allows us to visualise a broader and discursive pathway. The twists and turns of language as it meanders in discourse does not posit definitive solutions, but works to create better interpretations. Accordingly, the outcome of dialogue is uncertain, and the understandings that we may achieve occur as the conversation unfolds. Taylor, following Gadamer, argues that: [I]t is related rather to the kind of understanding we invoke in personal relations when we say, for instance: I find him hard to understand ; or at last I understand her. To switch for a minute to another language, it is the kind of understanding one invokes in French when one says maintenant on s entend. We are talking here in these cases of what you could call human understanding, understanding what makes someone tick, or how he feels or acts as a human being (Taylor, 1980, p. 30). This way of thinking about language provides a response to the challenges proposed by Francis (1990) and Sherer (2002). It is possible that we begin to tease out a way of thinking about accountability through a spirit of reconciliation which opens to us new horizons. It invites accountability researchers to consider questions of virtue in the cultivation of a sense of forgiveness, magnanimity and reasonableness. This notion of accountability involves much more than adhering to a set of procedures. It involves more than maximising options and minimising costs because it involves embracing others who are different from us. A first step is to recognise the political struggles in which accounting is involved; as well as the value of mutual indebtedness and inclusion, which involve participating in practices that reflect full and open dialogue. That is, it is now more important than ever before that accounting researchers investigate a conception of accountability that not only balances different values, but creates a strong form of reconciliation that resolves remaining problems of virtue and also explore the commonality-difference conundrum. This, it is argued, is to be achieved through a process of reciprocal recognition based on an enterprise that takes up the possibilities involved in the world disclosing possibilities provided in language. This way of thinking aims to offer an ethical climate that disturbs moral 7

8 prejudices that are created and perpetuated within the moral structures of accounting and organisations (see Laughlin 1987, 1995, 2002 and Power 1997). Here, it is useful to remember that Habermas theory of language is completely opposed to the strategy proposed by expressive inspired interpreters. Habermas recognises not only a threat of mere historicism, but also relativism and non-cognitivism. Part of his warning involves recognising how language can turn us away from what is right; this reflects Habermas total dissatisfaction with those postmodern philosophers who might advise us to relax and enjoy the possibilities of life provided by modernity. He claims, therefore, that the only role of moral theory is to single out a procedure. It will be remembered that this way of thinking shares much in common with procedural conceptions of accountability. It is possible, however, that this way of thinking about accountability might exacerbate current problems associated with corporate governance and it seems that we are reaping this fruit in recent times. Moreover, the limitations of accounting and accountability have become more acute than ever before, and there exists a need to cultivate through experience the virtues involved in engaging with others (see Arrington and Watkins, 2002). These practices cannot be created through the implementation of pre-packaged sets of rules to govern behaviour. For accounting researchers, concerned about the connections between accountability and the virtues it is worthwhile returning to ideas advanced by Herder and Humboldt (see Francis, 1991). Both Gadamer and Taylor argue that these writers rekindled the spirit of Aristotle in recognising the importance of practices and endeavours that ingrain virtue in to our lives (Francis, 1991). Again, however, it is Habermas who warns against this substantive strategy, and claims that the substantive method elevates particular truth claims. But it is problematic whether his conception of language as a set of tools is able to create a climate where differences can be reconciled when our vocabulary is tamed by procedure. That is, Habermas method fails to explore in detail the history of language as a medium through which we articulate and listen to the voice of the other. Habermas perpetuates modernity s limited understanding of the role of language, which in turn affects the relationships between accounting and society. These problems have been made explicit in the work of Humphrey and Owen (2000) who reviewed Power s work on audit society and teased out some of the problems discussed above. They stated that it is unlikely that we will ever get the audits, let alone the society, that we really want (Humphrey and Owen, 2000, p. 29). Put differently, the conception of accountability that is implicit in the BLP school assumes that if citizens can abstract from their everyday deliberations and act within an idealised speech situation then their decisions will be just and binding on all other citizens. Arguably, Habermas way of thinking assumes that each citizen will respect each other and accord each their rights, just in virtue of their membership as a citizenship. Questions about each person s character, outlooks or the values that they espouse are submerged within the rule. And this is reflected in the current accounting systems difficulty in recording these intrinsic costs which have often been ignored within technical notions of accountability. While middle-range theory attempts to address these issues, they remain caught within an accounting language that supports the current system. Indeed, many critical accountants are becoming 8

9 unsatisfied with the staple diet that includes social and environmental accounting frameworks which continue the trend to integrate these ideas within the current system and never really change anything (see Humphrey and Owen, 2000). That is, a broader and expressive theory of language is concerned not only with the reformation of accounting, but its transformation. It seems to be the case that this instrumental framework informs Laughlin s accounting work with Jane Broadbent; and Power s solo work in to the role of audit, audit explosions and environmental accounting (see Power, 1993, 1997). Notably, Broadbent and Laughlin have explored, among other things, the effects of accounting on health-care systems and illustrate the problematic implications of some modern bureaucratic accounting and offered some political recommendations (Broadbent et. al. 2002). For example, Broadbent and Laughlin (2002) argue that the health care sector has been colonised by free-market forms of reason and rationality, but this has been at the expense of a caring health system. Free-market reforms put money and rationality first and people second (a traditional critique of RATS). In following Habermas insights the BLP model is predicated on the capacity each the individual (monologic) agent to counteract the distortions of modernity and its culture of money, power and procedural rationality. This is to be achieved through the exercise of moderating the often unanalysed variable - power in the public sphere that often distorts communication between human agents. Habermas discourse model is designed to assess the truthfulness of assertions and is used by the BLP school to adjudicate the utility of accounting reforms. This is despite the fact that accounting reforms have not been successful in cutting across moral issues and creating a climate where reports contribute to a virtuous civil society and a common climate committed to reconciliation and tolerance. Nevertheless, a crucial limitation of Habermas theory of language is that it does not consider why some people can enter the discourse model without leaving behind important values and ideas. It seems perverse then that others must ignore their important constitutive values that shape their moral sense and purpose when they enter the discourse arena. Notwithstanding these problems the direct relevance for accounting and business of Habermas communicative ethic is its democratic means to consider any truth claims advanced within the communities that comprise society. His attempt is to create an ethic that puts itself on trial and therefore would be binding on participants in the discourse arena. Habermas states: Discourse theory attempts to reconstruct this self-understanding [that of a universalistic moral consciousness and the liberal institutions of the democratic state] in a way that empowers its intrinsic normative meaning and logic to resist both scientific reductions and aesthetic assimilations After a century that more than any other has taught us the horror of existing unreason, the last remains of an essentialist trust in reason are destroyed. Yet modernity, now aware of its contingencies, depends all the more on a procedural reason, that is, a reason that puts itself on trial. The critique of reason is its own work: this Kantian double meaning is due to the radically anti-platonic insight that there is neither a higher nor a deeper reality to which we could appeal we who find ourselves already situated in our linguistically structured forms of life (Habermas, 1996, p. 11). 9

10 Yet, again Habermas assesses communication that is incompatible with the good, or better life. These set a procedural test that substantive claims must pass in order to be normatively valid. They consist in universal rules of discourse reciprocal accountability, inclusiveness, freedom to question claims and to presuppose counterclaims, non-coercion these reflect the legitimate procedural constraints that we are entitled to make, that indicate the basis for rational agreement regarding the justness of a given norm, or assertoric statement. Habermas framework is, therefore, based on an ontology of individualism which assume that if people follow the rule then reconciliation can be achieved. 6 This is used by the BLP school to construct a model which determine the admissibility of each claim presented in the public sphere (speech arena). If the utterance does not pass that test it is not admitted. As Laughlin and Broadbent (1993) have stated there is a need to debate whether this really is good from the perspective of [these] key institutions and society more generally (p. 364). Again, the relevant question is whether their method has the ability to tease out and respond to important cultural and social values in a spirit of openness and democratic accountability. In teasing out Habermas assumptions it is problematic whether each individual, in the discursive structure, has the power to create social change. Or, arguably, whether a more substantive re-examination of the role of communication and reconciliation is needed (see section 1 above). Nevertheless, despite these concerns Habermas ethic does have the advantage that it opens up accountability research to consider whether a reconciled social world can be constructed within the communicative sphere. Habermas very strong claim presupposes that in the vertigo of the ideal speech situation, each participant will through a complete process of participant perspectives, unleash the higher-level intersubjectivity of the deliberating collective (Habermas, 1996, p. 280). This complex argument boils down to the claim that an agreement reached in the discourse arena is to take precedence over the value that lies within a particular discursive truth claim. According to this Habermasian line of reasoning, it is possible to move from disagreement to agreement when people (interlocutors) give ground to the superior position. But, this leaves the underlying differences in tact and perpetuates a narrow accounting framework together with a limited ethical enterprise. We continue to operate in a world of KPI s, balanced score-cards, ethical audits and so on. Yet, accounting has the potential to take on the role of moderating discourse and evaluating the worth of claims made in the discourse arena. To inform the public sphere and heal differences and square commonalities. Through this process of role reversals it is argued that the ethical content of a discourse ethic can be seen to apply to the wider social sphere. This can be stated more simply by pointing out that in an ideal speech situation (discourse arena) each participant assumes that each person will give up their broader moral and religious doctrines, and be guided by principles of reason and rationality. This assumption, itself built into Habermas procedural ethic, does not tease out a conception of political reconciliation which embraces and engages others who are different from us in a spirit of openness and with a view to expanding our horizons, healing our divisions and articulating common purposes. For example, the accounting profession claim to utilise a due process but this enterprise is not guided by a spirit of reconciliation that reflects a notion of 6 While Power and Laughlin (1996) argue that Habermas and Rawls offer similar methodological perspectives this might, however, lead us to overlook the very real differences which impact on the guidelines that they provide in restructuring modern communities. 10

11 accountability that gives an account to others that recognises their very being-in-theworld. An expressive inspired extension to Habermasian notions of accountability work to integrate community concerns, and thereby address accounting researchers concerned about its wider social and cultural impacts. Here, Shearer (2002) has reminds us of Cooper s (1992) observation that accounting does not stand outside of the wider socio-political economy (p. 569). The implication is that this way of thinking applies with equal force to the reform projects advocated by the BLP school. That is, Habermasian reforms are hamstrung by their reliance on a procedural epistemology which offer an incomplete and narrow projection of reconciliation. For example, Pellizzoni has explained that the dilemma implicit in Habermas model reflects his universal solution to ethical and moral dilemmas when the problem under consideration is difficult to predict. He explains: This feature makes the universalizing rule impossible to enforce. In fact, evaluating the primary and side effects of a choice becomes impossible. It becomes questionable deciding what the effects will be, with axiological orientations the validity of which, following Habermas, this evaluation should help us to ascertain. Habermas says that a policy is fair only if its implementation is equally good for each individual. But one is prevented from reaching an agreement on a policy, deemed desirable to everyone having an interest in the issue, due to the impossibility of stating with reasonable certainty what the output of the implementation will be. (Pellizzoni, 1999, p. 119.) That is, the question that accountability researchers must consider is whether Habermas model can escape its own terms of reference. Again, these problems emanate from his emphasis on procedural rules as the optimal means to achieve justice in our deliberative structures (see Taylor, 1991, 1993, 1998). That is, we need to think about how we are going to create and maintain the highest standards of accounting, governance and political morality that civilization has created. More importantly, we need to know how we assure that these standards will remain in force? Indeed, at the very end of all this Habermasian work one remains unsatisfied. It is worth quoting Taylor s summary of Habermas work on Kant and Hegel when he stated: [I]ndeed, at the end of this paper, rather like at the end of an episode in one of the serialized adventure stories of my youth, the hero is left hanging over a cliff, about to plunge into the abyss, to the mocking laughter of the post-modernist fiends. The question is, how to rescue him, both normatively and in historical fact? (Taylor, 1999, p. 1). If we are to move beyond the limits of Habermas theory of language it is useful to reassemble and consider some of the pragmatic implications of the Broadbent- Laughlin-Power model. It is argued that while they move closer to a broad and encompassing dialogic model it remains useful for accounting researchers to develop another theory of language which might provide additional pointers to their pragmatic proposals for evaluating reforms. Accountability, Reconciliation and Expressive Language Theory As a matter of fact, accountability considerations have been identified in the BLP school as well as in Schweiker (1993) and in Shearer (2002). All these authors invite us to explore the presuppositions on which a theory is based to understand whether 11

12 accounting satisfies its moral obligations to relevant publics (see Williams, 1987). On the one hand, the BLP school reflect an awareness that our life-world can be colonised by bureaucratic forms of reasoning which can be avoided through a democratic revision to that procedural direction. On the other, Shearer (2002) calls for us to think about the needs of the Other ; where it is argued that the needs of the Other are submerged in neo-classical models. The conception of accountability being teased out herein attempts to meet Shearer s demand. This involves rethinking how we imagine the world and its accountability structures such that they become incapable of assimilation to the logics of economics. This reflects an accountability which furthers everyone s plans and not just those that who hold power and influence (see Taylor, 2001, p. 89). Furthermore, it is important to consider the different values which exist within social systems and whether they can be combined in a framework which respects differences. Responding to Habermas both Gadamer and Taylor have commented on the usefulness of Herder s and Humboldt s work. Taylor has observed: But for Herder the existence of this representational or linguistic consciousness is the central question. What is it which makes it possible for us to have this distinct, focussed awareness of things, where animals remain caught in the dream-like, melodic flow of experience? It is language that makes this possible. Hence language must be probed from an entirely different point of view. It is not just a set of signs which have meaning in virtue of referring to something, it is the necessary vehicle of a certain form of consciousness, which is characteristically human, the distinct grasp of things which Herder calls reflection (Besonnenheit). In other terms, words do not just refer, they are also precipitates of an activity in which the human form of consciousness comes to be. So they not only describe a world, they also express a mode of consciousness, in the double sense outlined above, that is, they realize it, and they make determinate what mode it is. (Taylor, 1975, p. 19). Here Taylor renews an expressive dimension which Habermas has continually denied as important. Habermas maintains that both Gadamer and Taylor are relativists who operate with a dangerous conception of practical reasoning. Taylor, however, denies this charge and urges us to think about Gadamer s work which he believes takes us back to Herder. After all, it was Herder who recalled the interrelated and communal dimensions implicit in the functioning speech acts within a philosophy of language. For accountability research, the BLP school have not explored these limitations of Habermas model. They continue to rely on the ability of each individual to solve moral problems on their own. Here, it is worth reflecting on Gadamer s hermeneutic work, which deepens the role of the philosophy of language; more particularly, this is important because of the very great differences between Habermas and Gadamer on this topic. For accounting and accountability purposes, this broader dialogic model provides a new means to re-consider accounting, business and society. It allows accountability and ethical theorists to think beyond the rules of a balanced score-card, due processes, audit committees, whistleblowing techniques among the many new accounting products on offer. Intriguingly, Gadamer has acknowledged a debt to Heidegger whose Being and Time has provided perhaps the most famous discussion concerning how the 12

13 background figures in shaping not only language but also discourse. 7 Put simply, this way of thinking about language asks us to consider people s strong values before we begin to implement policies. Moreover, Gadamer s work on language is about reaching understanding in successful conversation when both parties are transformed and enriched through the truth of the object under consideration. Gadamer has offered the following famous definition concerning the role of language: Our first point is that the language in which something comes to speak is not a possession at the disposal of one or the other of the interlocutors. Every conversation presupposes a common language, or better, creates a common language. Something is placed in the center, as the Greeks say, which the partners in dialogue both share, and concerning which they can exchange ideas with one another. Hence reaching an understanding on the subject matter of a conversation necessarily means that a common language must be first worked out in the conversation. This is not an external matter of simply adjusting our tools; nor is it even right to say that the partners adapt themselves to one another but, rather, in a successful conversation they both come under the influence of the truth of the object and are thus bound to one another in a new community. To reach an understanding in a dialogue is not merely a matter of putting oneself forward and successfully asserting one s own point of view, but being transformed into a communion in which we do not remain what we were. (Gadamer, 1975, pp ). Here, Gadamer is arguing that the role of language cannot be constrained by procedure as Habermas does in his work. This way of thinking about language recognises that in a successful conversation we are transformed in a process of mutual recognition. In such a world, the role of accounting is to provide financial and other information to create an information rich society (Sherer, 2002). This Gadamerian inspired way of thinking about language, information and society takes us toward a conception of civil society which works to create an auditable world where dialogue and conversation act as democratic means to achieve understanding and recognition (Power, 1997; Neu, Cooper and Everett, 2001). Though it is problematic whether traditional reform measures such as whistleblowing, codes of conduct and audit committees provide the type of communicative action which is needed to counter the dominant culture of money and power (see Power, 1997). In responding to the challenge set out by Power (1997) the Gadamer-Herder perspective on language takes us beyond free-market and procedural frameworks which offer only limited means to express the significant values that shape people s lives. The accounting implication is that information is part of a language, which is not simply at the disposal of one person, but presupposes a community of people enhance the possibilities available to all people. It is argued that the Gadamer-Habermas debate provides new ways to think about these processes with concomitant flow-on effects to accounting and corporate governance. Their work offers new pathways in moving toward a critical-interpretive perspective where theory must be guided by particular phenomenon and vice-versa (see Arrington and Watkins, 2002). In addition, this expressive pathway is not restricted to a simple focus on economic determinations and this is to consider the whole of experience that shapes people s being-in-the-world. This way to consider 7 These relationships are not discussed in this article. Though this article does not endorse or advocate illiberal accounting strategies to create the greatest good for the greatest number. 13

14 language argues that discourse is a shared activity and is not something that is a possession of each person. The expressive language critique of Habermas theory is not hostile to the idea that to escape modernity s alienation and anomie, it is necessary to transcend the exploitative and destructive practices associated with capitalist enterprise (which is supported by an uncritical and technical accounting). Therefore, in following Habermas the BLP school of thought does not consider the democratic dilemma involved in how to determine the community common good and how the public sphere can continue to be colonised by a systemic structure which absorbs reform proposals (see Gray 2002). Central to this critical-interpretive extension and critique of middle-range accounting is the argument that a substantive reworking of practical reasoning actually incorporates Habermas discourse ethic in moving accountability forward. This strategy would allow us to avoid the concern that Habermasian middle-range thinking and its skeletal ontology narrows the role of communication and discourse. It also provides a means to consider what a better society involves and the role accounting would play in such a society. If discussions of accounting and language take place in isolation to such moral issues it is unlikely that an enabling accounting will have the power to articulate the horizon of values which shape modern communities. Moreover, it is against this tacit background of values which must be explicitly incorporated into the BLP framework in creating a reform pathway to guide an accounting to create a full expressive understanding of the life-world. It is in response to these issues that the skeletal ontology must be enriched to take account of the moral values which inform accounting systems. More importantly, this way of thinking about language and our ability to reason provides a means to evaluate how modernity has shaped accounting as an instrumental discourse (Laughlin, 1995, Power, 1997). That is, the usefulness of the Habermasian applied perspective is that it takes us away from the philosophy of consciousness, but this strategy cuts philosophical scrutiny off precisely at the point where interpretation is most needed. It is for this reason that the ideas offered by Herder-Humboldt and Gadamer-Taylor provide a theoretical means to consider and reformulate the institutions of modern democratic society and thereby escape the tunnel vision of Enlightenment, reason and rationality. According to the expressive language perspective, it is Habermas and other theorists of a procedural turn who perpetuate a culture of accumulation and alienation even though they believe that they offer us an escape route. From the Herder-Gadamer-Taylor perspective, it is through language that thoughts are developed and transmitted thereby providing a means to appreciate the values of significance which shape the possibilities within communities. To make these ideas perhaps a little more concrete it is useful to consider the accounting interventions that have been advanced by Prem Sikka and his Association for Accountancy and Business Affairs which promotes other voices in civil society (see Sikka 2001a, 2001b, 2002). His interventionist strategy dovetails with the thinking implicit in Herder, and more recently in that of Gadamer and Taylor. More particularly, Sikka and Willmott provide useful ideas that coalesce with the interventions and reinventions of accountability that an expressive conception of accountability points toward. This way of reinventing accountability research is about articulating what we are for, and what we are against. It reveals an appreciation that what is significant might not be revealed when the basic institutions in civil society have as their mission a preference to satisfy the rules of the game; in this way the conception of accountability explored herein is about imagining a democratic structure which provides space for different voices and ways of being-in-the-world. 14

15 The ideals proposed for accountability research aim to create a social imaginary where citizens are provided with an account of issues associated with identity, culture, nature and society (for specifics on institution building see Neu, Cooper and Everett, 2001, p. 757). This expressive way to think about accountability, interpretation and accounting dovetail with notions to rebuild civil society not only for technical purposes, but because we are part of a greater social whole over which we have no ultimate control. According to this perspective, language not only provides a means to designate meaning, but is also a medium through which conscious thoughts become part of our everyday existence, thereby providing opportunities to re-connect our relationships with world as world. To develop a further line of critique it is worth remembering some of the cultural and environmental limitations of an instrumental and designative conception of the world. For example, Taylor has developed the implications of Gadamer s theory. He states: The original impulse of nature is right, but the effect of a depraved culture is that we lose contact with it. We suffer this loss because we can no longer depend on ourselves and this inner impulse, but rather on others and on what they think of us, expect from us, admire or despise in us, reward or punish in us. We are separated from nature by the dense web of opinion which is woven between us in society and can no longer recover contact with it. (Taylor, 1989, p. 357) In developing this Gadamerian insights this interpretation of language theory locates the limitations of modernity within the dominant rational traditions of enquiry. An instrumental and designative theory of language, however, offers not only a partial understanding of humanity, but also a limited means for citizens to participate in the communicative structures of modern communities. An example that is often used is that of the accounting due process which guide the formation of accounting standards and international accounting standard setting. Here, accounting can only be conceived along monological lines and offers only a designative means to report significant actions to civil society. Again, accounting remains an individualistic and self-seeking activity that is detached from the community structures which shape people s lives and beliefs. Central to the methodology proposed in this article reflects a need to move beyond Habermas and his partial, uncritical and procedural consideration of societal relations. The BLP school of thought in not exploring an expressive theory of language, then, offer only a procedural means to extend human knowledge and understanding and perpetuate an equally narrow and technical accounting structure in civil society. Modernity needs to avoid becoming isolated, individualistic or overly specific if it is to transcend the current limited social structure. In bringing this argument to a close it is worthwhile remembering Habermas response to the Gadamer-Taylor tradition that the Enlightenment tradition of procedural and rational enquiry must be preserved. 8 Here, technical accounting is at home in that it is possible to argue that they have included environmental and cultural considerations. But nowhere does that argument consider, or provide a report concerning the extent to which change has been enacted. It might be argued that triple bottom line reporting is a move beyond procedural and technical accounting and procedural decision-making. To do anything more would justify authoritarian and relativist accounting structures. Accounting, on 8 See Shaw, B. J., Habermas and Religious Inclusion: Lessons from Kant s Moral Theology, Political Theory, Vol. 27, No. 5, 1999, p It is problematic whether his procedural stance to modernity captures the Kantian injunction through theoretical reason to instititutionalise the ethic of Christian morality. 15